Despite Price Increase, Everpure CEO Confident Of Leading Storage Market Share

‘I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can,’ says Charles Giancarlo, CEO of Everpure.

Everpure reached its first $1 billion quarter this year, even as the storage and data center vendor faces global supply chain constraints and chip shortages. Those pressures prompted the company to raise prices, with CEO Charles Giancarlo explaining how the issue has affected the business.

At the Pure Accelerate summit in Las Vegas, Giancarlo again addressed the issue, telling partners and customers why the increase was necessary and why he does not expect the problem to ease soon.

Despite those challenges, Giancarlo said he remains confident Everpure can meet customer demand for flash this year.

“The interesting thing is as of last quarter, we now ship more flash than any other competitor. And I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can,” Giancarlo said during both his summit keynote and his keynote to partners.

During a media session at the summit, Giancarlo said he sympathizes with customers because the issue goes beyond higher prices. Customers, he said, also lack a clear basis for judging whether they are getting a good deal.

“First of all, we live in an industry that generally deflates. In other words, pricing goes down over time. That’s been true for decades. And now, all of a sudden, not only is pricing going up, but it’s going up by an incredible amount. And now the customer doesn’t really have a basis upon which to know if they individually are getting a good price or not. So I have a lot of sympathy for customers overall. But this is a worldwide phenomenon. It’s not just ours,” he said.

Giancarlo said the impact extends beyond data storage to every semiconductor component, whether it is a 10-cent part or a $10,000 part. Because semiconductor manufacturing is a fixed-cost business, he said it takes years and billions of dollars to build a fab and bring it online.

“They don’t come online at the flick of a switch or at the snap of your fingers. And so when the demand far outstrips the total capacity of semiconductor fabs, where it’s going to take years to catch up to that demand, pricing just skyrockets. The fab capacity has also shifted towards the AI environment, taking capacity out of even the cheapest components. So it’s a world we’re all going to live in,” he added.

Giancarlo said the situation has also revived the hybrid market, which combines hard disk drives and flash.

“That has a new lease on life for a period of time. That’s probably been the major change. But outside of that, it’s affected the entire world,” he said.

Asked about accusations of profiteering from the situation, Giancarlo said Everpure is sharing the pain as well.

“We have a proof point. And the proof point was we indicated in our fourth-quarter call that we were going to operate at the lower end of our gross margin range, and we did. Clearly, that was a decision that we made. And that tells you whether or not we’re profiteering on this. If your gross margins go up, we’re effectively a middleman for semiconductors. We have a lot of software and so forth. But our physical bottom is affected by the price that we have to pay for a semiconductor, which has gone up somewhere in 6x to 8x in just the last six months,” he added.

“It’s breathtaking. Our prices have gone up by far less than that, and we’re operating at a lower gross margin and that’s the proof point. We’ve been following competitors’ price raises. They’ve been sooner than ours, and they’ve been larger than ours. So I would argue we’re not profiteering, and the proof is in our financial results,” he said.

This article originally appeared on CRN sister website CRN Asia.